Nasty Flu Season Could Lead to Sickly Growth

The Centers for Disease Control and Prevention has labeled the 2013 flu season as one of the worst in the last 10 years — and it hasn’t even peaked yet.

Bloomberg News

The virus has been reported in 41 states — with 29 reporting high or “severe” levels. Public officials in Boston declared a health emergency Wednesday as flu sufferers flooded emergency rooms.

A major flu outbreak could be an additional drag on first-quarter growth. Lost work time, canceled meetings and slower productivity growth can combine to sends chills through an economy already hobbled by higher taxes.

A study by the U.S. Bureau of Labor Statistics looked at employee absences and found, not surprisingly, that illness-related absences spike during the winter flu season. (Sick time included time off for a worker’s own illness or to take care of a family member.)

For the six years studied, sickness-related absences ran 32% higher during the flu season than for the rest of the year. The highest number of workers absent was 3.3 million in February 2008, coinciding with 2007-08 flu season that was more severe than in past seasons.

While 3.3 million may not seem large in a labor force of 156 million, the number far surpasses the number of workers who stay home because of bad weather. For instance, the severe January 1996 blizzard caused only 1.85 million employees to miss work.

Plus, the Labor figures count only workers who caught the flu during the weeks when the Labor Department did its monthly payroll survey. Millions of others may have called in sick at other times in each winter month.

The flu season could cost employers billions of dollars, says outplacement firm Challenger, Gray & Christmas. The firm cites CDC estimates that the flu, on average, costs employers $10.4 billion in direct costs of hospitalization and outpatient visits. That doesn’t count business costs such as sick pay, work delays and reduced efficiency.

“This year, the cost to businesses may be significantly higher in light of the increased number of cases,” the Challenger press release said.

That’s especially true, warns the outplacement firm, because workers who are worried about losing their jobs are more likely to come into work even when sick. Not only will they be less productive than when healthy, they are very likely to infect their coworkers.

Challenger gives some suggestions to curb the disease’s spread, including limiting meetings and expanding telecommuting.

About Real Time Economics

Real Time Economics offers exclusive news, analysis and commentary on the U.S. and global economy, central bank policy and economics. Send news items, comments and questions to the editors and reporters below or email realtimeeconomics@wsj.com.